Week in Edtech 6/12/2024: OpenAI’s ChatGPT Edu, Google AI Overviews Visibility Drops, PowerSchool's Acquisition by Bain Capital, Alibaba Invests $27M in Education Start-Up, Apple Intelligence, Doowii's $4.1M Funding and More! Feat., Paul Gollash of ETS

Join Alex Sarlin and Ben Kornell as they explore the most critical developments in the world of education technology this week:

🎓 OpenAI introduces ChatGPT Edu for universities
🔍 Google AI Overviews visibility drops significantly
🌐 Google’s NotebookLM goes global with enhanced features
📱 Apple’s major announcements at WWDC 2024: Apple Intelligence, Siri makeover and more
💼 Bain Capital to acquire PowerSchool in a $5.6B deal
🇨🇳 Alibaba invests $27M in an AI-powered education start-up
📉 BlackRock slashes Byju’s valuation to zero
💡 Imagine Learning acquires AI-powered CueThink
🤝 University of Tennessee and ASU’s $11.5M collaboration
📊 Doowii secures $4.1M for AI-driven data analytics in education

Plus special guest, Paul Gollash, Senior Vice President of K-16 at ETS

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Transcript

Alexander Sarlin: 0:26

Welcome to Season Eight of Edtech Insiders where we speak to educators, founders, investors, thought leaders and the industry experts who are shaping the global education technology industry. Every week, we bring you the Week in Edtech, important updates from the EdTech field, including news about core technologies and issues we know will influence the sector like artificial intelligence, extended reality, education, politics, and more. We also conduct an in depth interview with a wide variety of EdTech thought leaders and bring you insights and conversations from edtech conferences all around the world. Remember to subscribe, follow and tell your ed tech friends about the podcast and to check out the Edtech Insiders substack newsletter. Thanks for being part of the Edtech Insiders community. Enjoy the show.

Ben Kornell: 1:18

Hello, Edtech Insiders community it is so great to have you here we are hitting mid June, summer is upon us everyone is figuring out their summer plans. And also the spreads is here back to school product development has started and the clock is ticking. So hopefully you're all in some sunny Caribbean spots, listening to the pod but if you're jamming on product version 24 We're also excited to have you with us today in terms of edtech insiders community June's actually a really busy month, we have our game EdTech Night at a baseball game for the Oakland baller. So our first professional sports event, this is going to be incredible. co hosted with workshops. So thank you, Mike and the workshop team. And then we've also got the SD arcade nights. So yes, we love video games. And yes, we love Ed Tech, we're putting the two together all of our favorite ed tech people unlimited playing time, thank you to Arman from brisk learning for putting that together, and also our regular sponsors, talk advisors for supporting us in all of these events. What about on the pod? What do we have on the pod Alex?

Alexander Sarlin: 2:36

Yeah, before the pod, I just want to say I'm so excited, I'm actually going to be at this ISTE event. So I will be down in Denver, playing the games chatting everybody up, I'd love to see any of you there who are in the ISTE Edtech Insiders, you know, community who are going to be there and the Edtech Insiders plus community has been really amazing. We have just a very vibrant chat happening in in WhatsApp and people are there's all sorts of stuff, we're finally getting our first premium content out this next week. So that's been cool. On the podcast, we have Jeremy Roschelle coming up Dr. Jeremy Rochelle, one of the absolute, you know, leading lights in learning sciences, he's the Head of Learning Science at Digital Promise that is going to be next week, we just had an interview with Mark Heaps from Groq, one of the sort of the open source LLM rappers that have been a little bit under the radar, but actually doing really interesting work. And we are going to be talking to the CEO BrainPOP very soon. So that will be a blast BrainPOP, one of the oldest school and best I will say I think one of the best K 12 ed tech content platforms with games and videos out there. So really excited to talk to them. So let's jump in what is happening in the world this week?

Ben Kornell: 3:49

Well, you know, normally we start with AI. But this week, I think there's a lot of edtech business news that just deserves some time to walk through and make sense of, I think on the headline news, and we're going to walk through each of these. But on the headline news, the bain acquisition of Power School is really making a lot of waves. And just to start their power school, basically a publicly traded company that they're taking private. Why It Matters is first and foremost. This is a major player in student information systems in education, they also own an LMS. And they basically control the data layer in K 12 education. Now it's still fragmented space. But that's a big deal in and of itself that you know, Power School is getting a major private equity buyer. Second is that it's a public benchmark a valuation that actually is above the trading price and sets a positive edtech exit valuation that really cascades down to affect everybody else's valuation. And so we've seen kind of a bloodbath in public markets. We've seen a bunch of unicorns getting repriced, down to not very much or zero as we're about to talk about with 5g use. So this is a win for the sector. And it's a win for the group behind our school really, you know, is a success story in terms of the business side. Third, I think it is a question about these new players in the EdTech private equity space that are leveraging more and more influence, as venture becomes more conservative, there's a bunch of down rounds, if there's real friction in the early stage, what you find is the private equity groups, which are sitting on a lot of capital have a lot of leverage in terms of, you know, acquiring and so on. And Bain has this really interesting structure. So Bain and Company, a consulting firm started Bain Capital A long time ago, they're actually separate organizations and Bain Capital, my understanding has different arms, there's the venture side, which is early stage, there's the double impact side, which is around investments in high impact good for the world, double bottom line companies. And then Bain Capital, which is a pure private equity play. And the way private equity works in the way they capital works is you have a certain amount of cash on your balance sheet, but then you borrow from other people to make these big acquisitions. And the bet is that I can pay off that debt. And then I ended up owning the whole company that's worth way much more for only putting a little bit of money of my own money down on it. So that's, you know, I wrote a LinkedIn posts about this, and probably will write a blog on this, but vein has been super active in the space they've been ventures led the round with magic school being double impact led the mediocre round, which is a furniture company, which kind of sits at the infrastructure layer of K 12. And then you've got this huge deal for the largest, basically, infrastructure and Power School are the two biggest K 12 Data Layer players. And so this is a real shot across the bow to other groups like TPG, which has an impact fund, there's also KKR has an impact fund and a number of other huge private equity groups have in you know, over the last five or 10 years launched these impact funds, but many of them go towards, you know, environment or climate, they go towards health care. This is a really big push in the education space for me. So that's my take on it. And it is a fascinating moment that I do think caught a lot of people off guard. No,

Alexander Sarlin: 7:48

yeah. When we, you know, we've reported on the rumors of this in the last week in ad tech. And now that it is official, and they officially acquired, you have the numbers which are really pretty interesting. So Bane is paying$5.6 billion for Power School, that's the borrowed money that you're talking about, then and PowerSchool, has reported earnings of 185 million in the last quarter or in q1 2024, which, you know, extrapolate out, you're talking about 700 Something million a year of revenues, and there are some analysts predicting the company will reach profitability this year. So it feels like as you said, it's a fragmented market. But with a few big players, the few sort of players with big chunks of the market in structure and Power School are the two big ones. And it's really interesting to see them jumping into something that, you know, the numbers seem pretty solid, at least from the outside, I agree with you as well, that this is just good for the sector, right? It's just It's good to see somebody as serious as Bain, which is, you know, one of the big hardcore investment funds and management consulting companies putting money towards edtech and saying, Hey, we have some confidence that at tech companies still have some real upside. That's exciting to see. Let's talk about these zeros that you mentioned in passing. So we had two articles coming out in the last couple of weeks that were sort of the opposite story in some ways. One is about Blackrock is slashing the value of its stake in by Jews to zero on its balance sheet saying that it is not worth that their stake is not worth anything. And then we have VISTA equity, which had taken Pluralsight private a few years back riding up the value of that as zero. Now to be clear that one is not saying that the company is worth zero, it's saying that the value of their steak compared to what they paid for it, when they bought it is also zero, but double zeros is not the kind of number you want to see coming up. What do you make of these two stories? Ben?

Ben Kornell: 10:17

Well, I think one is a long term story. And one is a structured snapshot. The long term story of that by Jews is really the rise and fall of that company. And it's a conglomerate of acquisitions too. And so the question remains, is there value in the independent entities of by Jews, and given that by Jesus so saddled with that the way a balance sheet works is your asset is only worth as much as the kind of liabilities balance out. And so the liabilities here are just so massive that if there was a way to kind of clear out that liabilities segment, which is what like bankruptcy usually does, you know, you kind of restructure the debt, the debt holders basically become owners of the equity. And then the company can be worth something, although investors get washed out, but it doesn't mean that the company's worth zero at the end of that process. But right now, they owe more than they're worth is basically what this report is saying. And by the way, also, all investors have not written this down. So there is a game that investors play around expectations. And that, you know, they use analytics to back their decision. But you know, you can use data to backup a bunch of different decisions. And so marking something down sometimes has a real advantage in your portfolio, one, it might lower expectations, to it might have a tax advantage, or three, it might be a leverage point where you're trying to get the company to do things for your equity. And this is a leverage point to kind of get them to move or change. So I wouldn't take it as pure and total fact, but it definitely on the trend line, as we look at the dots over time. That's what signals the plural site, one is really just a kind of throw up your hands. This was a flop kind of moment. And, you know, I think in education and edtech, we have a real hard time with failure. One because we want every child to succeed, we want every company to succeed. And ultimately, when something is working for people, and then it shuts down or it no longer does what it does, it can do harm. So there's like a moral quandary in education that doesn't exist in all other fields, healthcare would be another field where, you know, going belly up, it has a negative effect in the investor world, often, you know, in venture, it's like 95%, you know, don't return and 5% return the whole fund. I think just seeing something though, like Pluralsight, which is just on a massive scale, go to zero, I think that that's gonna further shake the confidence of big investors in our space, because they're going to be quite concerned that their billion dollar investment could go to zero, right? You know, a little bit more about what coral site does, and the market, there could be specific pieces of their business model that just no longer work. And AI certainly has a role to play in this disruption. But I think it's part of a bigger macro story for Microsoft. So

Alexander Sarlin: 13:36

again, worth I think, noting they had bought this for $3.5 billion. So to your point it three years ago. So the idea of, you know, we see the bein spending 5.6 on PowerSchool, and VISTA had spent more than 3 billion and now it's reading off at zero, it does feel like, you know, these trains going in opposite directions in terms of the narrative. I mean, one thing that's interesting about Pluralsight, the article that talks about this says that there may be a sort of threat of AI, which is interesting, the Pluralsight is a really, I think Pluralsight is a terrific edtech company. And they have been basically a training company for cutting edge digital skills for quite a while. And they've put together you know, very sophisticated benchmark assessments to tell people what skills they have, and what skills they need at an individual and a corporate level. They put together, you know, huge number of courses, and then keep them up to date, which is very difficult to do in tech, right, so that every time a new version of a operating system comes out or new tools or new API's, they're very quick to get new classes up by experts in the field. So it's almost like a super tech focus, Lynda LinkedIn learning kind of play. And in my Coursera days, we'd often look at Pluralsight, with a little bit of envy, because you know, Pluralsight, was able to react very, very quickly to technology changing, especially compared to Coursera, where the content at that time was coming purely from universities, which didn't always move that quickly. That said, I'm a little surprised, actually, that people think that Pluralsight is worth less in the AI era, there's a case to be made that they're fast adaptation and ability to teach technical skills very quickly at scale with experts. And as well as benchmark them, I would think that they are probably pivoting pretty hard towards AI. And I can imagine them having a lot more potential customers, both on the b2b side, if they were to be able to be seen as the AI training platform. That obviously is not how VISTA is seeing it at the moment. But this feels like somewhat bearish taken maybe you're right maybe it's a tax play or something that somebody you know, makes a headline, but it's really something happening internally at Vista rather than their actual complete loss of faith. In Pluralsight, which I've always admired, I think it's a terrific it's a Utah based really good tech platform that has has done a lot of really amazing things in the field. So we'll follow that story as it continues. We've talked about Bain, we've talked about VISTA, we've talked about BlackRock, we're talking about a lot of these big dawg, money companies and private equity. We have one more to talk about because they're all over the place this week. Ali Baba, Ali Baba, the Chinese retail giant, invested$27 million this week in an education startup called forgive my terrible Chinese Jing Zhang, Xiao Wei, please forgive me, but Jing Zhang Wei, which is an AI powered education device, which is going to use Ali Baba as model as well as a self developed LLM to do AI generated video lessons taught by digital teachers for tutoring and teaching. Very interesting. You know, we talk a lot about open AI, and Microsoft, and Google and all of these. And Apple, you know, this week, obviously, and everybody doing AI here, this is almost like this parallel ecosystem around the world, where, you know, Baidu and Alibaba and Tencent, and all of these Chinese giants are absolutely thinking about AI. Absolutely developing models and doing things at pretty serious scale. And this is an interesting one, because it goes right to the sort of, I don't know if you want to call it like nightmare scenario, but right to the sort of true AI speculative future where you need to know something, you pull out a device, and it's gonna give a video lesson of it with no real people involved, digital teachers, digital content, created by some of the biggest Chinese companies out there, like Ali Baba, this year, we just don't follow the Chinese edtech system very much anymore, since that sort of collapsed, and they sort of pushed, you know, the rest of the world out. But this is an interesting story. It makes me really curious about where this is all going. Yeah,

Ben Kornell: 17:40

me too. And one, I'd say it's refreshing to have Chinese ed tech back in the news. Yeah, we're talking 2 billion learners, like that's meaningful. And, you know, also, I think it's just important to note that in China, the workforce learning is really robust. So I think there's a lot around Ah, well, but as you go to higher ed and workforce, there's just a lot of upskilling, that is government sponsored, and individually pursued, that I think makes it a really interesting, almost like closed economy, for the value prop of lifelong learning. What I think this investment shows is that you really have to take AI in education in the context of what is it competing against, if it's competing against nothing, and no one and lack of resource, then it can win, if it's competing against a human that is free to you, and available to teach you, it's going to lose every time. And I think there's real risk in this type of products, coming up with lessons that are inaccurate or not tuned to the learner or not teaching the latest things. You know, basically, remember, airlines are stereotyping machines, and they're predicting the next thing. And so, if 80% of the world's history has said, the earth is flat, and then in the last, you know, couple of years, we found out that it was round, they'll and may still say the earth is flat, because based on outdated information, in addition device and so on. But I think what this shows is that we're much more likely to head to what Ethan Moloch calls a co intelligence where it's not all one, it's not all the other, and that through different marketplace models, we're going to find people who are blending, and I'm especially bullish about developing world applications. And I know, China is an advanced economy. But if you look at the kind of entire constituency, the need for access to education is still high, the need for quality of education is still high. And you know, we've also seen that, you know, with the Apple announcement, which we'll talk about with Google announcement, you can now have full Ella limbs on your phone. There's like a real opportunity for Alibaba here, which is also backed somewhat by the Chinese government to really make inroads there. It reminds me most of Chiron learning, I would say in terms of us parallel, I think the Chiron scenario is like in partnership with educators and this one is in lieu of, but that will be a really interesting thing to watch. Yeah.

Alexander Sarlin: 20:31

We don't usually talk politics but reminds me of something that President Biden says a lot, which is you don't have to be better than the Almighty just better than the alternative. That's the sort of favorite line. And I feel like the alternative in China that class sizes are 38 to 60 students a been a little over Elementary School. I mean, there's, you know, we talk a lot about personalized or different types of learning that is somewhat more individualized or customized to the student in China, the chance of having a teacher, you know, take interest in you, in particular and try to sort of take you under their wing is a lot lower, because class sizes are much bigger. And as you said, the quality of teachers is very inconsistent, depending on where you are, there's a lot of variance, lots of big cities and lots of big rural areas, I've been over 100 cities with, you know, millions of people, or with over a million people and it's a really a very crazy country. And so I like your point a lot, that the ability to put AI generated quality education, I'm assuming its quality here, we'll say into the hands of individuals has more of a you know, Delta than it might in Europe or in the US really interesting point. And the other thing that makes me wonder about is you know, we all know that open AI and Gemini and all of these you know, check GPT and Gemini are trained on the internet the open internet, but China doesn't believe in an open Internet right so it also makes me wonder exactly how these AI models are trained Ali Baba is you know, Quinn model is a trained on the Chinese version of the Internet is a trained on on material coming from outside, is it trained on you know, party material I it very well might be? That's interesting, as well. And there's a little bit of a sort of potentially dystopian undertone of everybody having a device in their pocket to learn, but it's trained on Chinese communist policies. But who knows, as always, we will keep our eye on that. There's one more business thing I wanted to talk about Ben, which was in similar in some way, even though it's on a much smaller scale, imagined learning, which is a major, you know, curriculum company in the US acquired a company called Q think, which is an AI powered collaboration and problem solving platform, sort of an AI first platform for K 12 education. This one was interesting, you know, Q think, is about trying to be personalized interventions, you know, different kinds of assessments and supports, it's basically a, an AI solution. And so it's interesting to see a, you know, incumbent imagine has been around for a while buying up at AI solution, just because that's something we've been predicting a lot. But we haven't seen that much of it. What did you make of this one?

Ben Kornell: 23:00

My take on this one is that there's one a distribution advantage that the larger players have, that they're starting to flex to, there's a bunch of pickups that they can make where they're adding, you know, not just a new product, but capability across their whole set. And basically, the value prop of Cusick was actually making your thinking visible on these like charts where you can basically work through math or logic problems, but like map out your thinking, and what it allowed the educator to do is not just understand right or wrong answer. But where in the logic was somebody kind of getting it wrong, where they're getting off track? how are kids thinking about these things. And the other thing I loved about t think is students would actually create their own video of here's how I solved this problem. Here's how I thought about it. And so there's a collaborative element. While I think the acquisition I'm sure values that product, imagine now taking that capability of showing your work, assessing the process of problem solving, and then creating structured collaboration across your learning that is really an unlock. And if you get into the kind of sea level conversations of many of these midsize education companies, what they're realizing is, in an era of pulling back of spend, this is a consolidation moment. And this is where you go from being a like, you know, we're working hard. We're a midsize company we're doing you know, 100 million in revenue, or 150 million in revenue to this is our moment to become one of the next victims. And you see that curriculum associates and amplify and Hmh. All kind of made it to the next level in the last kind of period of consolidation. This is the moment for many of these mid sized ones. And some of them aren't going to do it. And some of them will. And that's, you know, I think that era of m&a that we were expecting might be a year late, but I think here we are, we're in it. Meanwhile, I think September, October, November, we're gonna see some desperate companies that are just running out of cash. So when you're trying to sell your company, remember that it's not just your products and not just your business. It's the capability that you're adding across the distributed company's products that can often be the strategic value unlock. Because when they're looking only at your individual business, then they're going to think, should we just build it ourselves? Should we buy you or a competitor? Or should we just do a partnership, but if it is an opportunity that level up their entire portfolio, then

Alexander Sarlin: 26:01

fantastic points all around, I think it feels more and more like a viable exit strategy for some of these many AI startups to, as you say, sort of focus on how might we create a something of a point solution, or something that is, you know, particular, but particular in a way that can enhance the capabilities of many other products, and especially some of the other product in the exact tier that you're talking about? Right? That's sort of, you know, imagine has been around 20 years, it's scaled, it is out there, but it's still not, you know, a giant in the industry. And I think they're probably looking after this time and saying, Hey, maybe it's time to sort of go to the next rung, I liked that read a lot. And

Ben Kornell: 26:39

by the way, I don't know exactly Q thinks cap table. But I also will say they were one of those who I don't believe aggressively raised capital from VCs. When you raise a lot of capital from a VC is harder to exit, because you need to have like a 10 times multiple and your exit or it's underperforming. And so it also, you know, the founder there, you know, my vibe from her was always super scrappy, getting a lot of non dilutive capital for grants, and and SBIR and NGSS grants, there's a way in which this may be an alternative path to fundraising, as well, for advanced tech startups.

Alexander Sarlin: 27:23

I think it's an amazing point. And you know, we've talked about micro companies and how AI companies can go with relatively lean with fewer people. And using the AI for a lot of the functionality, both operational and some of the tech functionality can make content can do a lot of things. And it's just feeling that there's a whole model that's starting to evolve, which is, you know, small company, stay lean, take minimal funding, take just what you need. And rather than investing a lot in marketing and trying to get that user base, instead, focus on the product, focus on the user experience, make it something people really love and that and that enhances other people's products, and then sell to one of these mid to top tier or top size ad tech companies, it makes a lot of sense. It's very different than what we've seen over the last, you know, long time. So I think it's going to take people a while to get used to it. Let's do a little quick round the world about some of the other AI stories that are happening, just because it's been a pretty busy week for this. I mean, we saw open AI introduce, I think officially really introduced chat. GBT. Edu, which is their university play. We've talked about this in the past. And it sort of involves mostly, you know, group licensing for the most part. But you can imagine pretty easily that there could be a there there where there's services where there's additional products that can be available for universities, specifically, where there's faculty products, you can sort of imagine more coming there. So it's interesting to watch that we also saw open AI being officially introduced into Siri, it's now you know, basically the Apple Siri AI that has been around for awhile, Syria is named after Sri, which is where Jeremy herself from surgical promise was for many years. Sri is Stanford Research Initiative. I believe I have that right, or Institute, Siri now can basically kick questions to chat UBT. And it'll be inside our iPhones, they also left the door open for working with others, such as Gemini, which we've also talked about in the past. So all these big tech companies are starting to run right into each other in some interesting ways. Last open AI piece that struck me so we reported a couple of weeks ago about how anthropic has been doing some really serious work to sort of try to open the black box of AI and understand exactly what or at least as close as you can to what they're actually doing inside there. What are the patterns, what can you you know, back map and start to figure out what what it's actually doing. And this week, we saw open AI, also developing methods to basically try to decompose GPT fours thinking its parameters, its features, and start to make sense of it. So that's really interesting, because as anthropic and open AI sort of opened the brains that they have created, that creates the idea of transparency, or interpretability, it just makes it much more feasible. And instead of it feeling like this, just total black box, which it has been, there may be some ways to organize it and change those patterns in ways that are better for society and for education. I went through a lot there, Ben, what is your take on open AI or the Apple we can move to the Apple stuff, which is pretty amazing. Yeah.

Ben Kornell: 30:20

When I dive into the Apple stuff, and you know, great points on open AI, and, you know, my view on open AI is they want to be the front door of the internet long term. I think, you know, search. All that is, you know, it's a power position to hold and Google understands that the open AI threat is much more on that search front door, and the Microsoft threat is on the enterprise and cloud side. on Apple, you know, I think some people hoped that they were going to have some sort of secretive launch of AGI or some kind of mind blowing thing. And I think what you saw from Apple was actually a double down on strategically where the world is heading, which is AI is actually the capability is getting commoditized in big tech. And it's all about the, what you can do with it. And so they basically are like, we own the device, we own the app ecosystem, the AI is worthless to you, unless it interoperate with the device in the ecosystem. So I think it ends up leading to a not very splashy announcement with like, some singles and doubles that are real practical hits. I mean, I think we've all known Siri has been underperforming as voice speech recognition agent for a long, long time. And so I think that will be really great. And then this idea that you can voice activated into apps, they're demonstrating with the Apple suite. But eventually, that's going to be a capability that any developer will be able to tap into, to create voice activation, AI activation. So that long term, an agent will be able to book you a flight or something like that through, you know, an Expedia app, and you're just dialoguing with it. And it's going and finding and coming back to you. brilliant move. And you know, when you're in, it's like Porter's Five Forces, when you're in the value chain upstream of everyone else, and you control it, that's important. At the same time, they've got to find a way to keep selling more iPhones, and selling more hardware and getting people to re up those. And so I think there is a way in which these enhanced features and figuring out how to link it with the new device adoption is going to be mission critical. On the flip, I think parents should be really concerned. Because as you start making these devices, so much more easy to use, we have a bunch of hackers amongst us, and they're called teenagers. And they will find every single way to use this for nefarious purposes and thwarting the adult overlords. And hidden naps really concerned me as a parent, this ability that I can hide apps from anyone looking at my phone. And you know, kids can kind of do that by like burying things in folders. But the fact that it couldn't even search or see alerts or have any transparency, I worry about that. Number two, is the ability to access my own on my desktop. The classic thing you do with teenagers, you say give me your phone. Now it's good to be able to get it anywhere. So you can't take the phone away, so long as they have access to some screen or another. And then I think the third one that I was looking at is the their math problem solution thing. And it's basically we've just gotten to the point where math cheating is so much easier than actually doing the work on a math problem that are we like, are we really just making it incredibly, are we just incentivizing every child to cheat? And so I wonder whether those developers were thinking, I wonder what a parent will think about this? I wonder what an educator will think about this? I'm not sure that they weren't thinking of that. I don't know what what is your take?

Alexander Sarlin: 34:26

Those are great points. I think they were probably not thinking about the parent use case. In particular, for all the reasons you said and others. I agree with you that these are sort of somewhat incremental announcements, especially for apple which loves to do these high giant, splashy, you know, let's show you the future kind of things. What I found interesting about their announcement, and their sort of branding is, for one thing, they're calling it Apple intelligence, AI, Apple intelligence. So they're trying to sort of stamp the entire field as an apple thing, which is, I think, kind of interesting. Or at least they're trying to have a branded version of AI, let's call it that. And their tagline is AI for the rest of us, which I find really interesting because I Apple's usually seen as a pretty elite tech company. It's not usually the populist company at all. But they're basically I think, looking at, as you said, looking at Chad Djibouti, looking at Gemini looking at Deep Mind, deep minds work looking at anthropic work and saying, you know, rather than compete with these guys, let's consider them the infrastructure consider them the the API's inside the Intel inside, right? And instead, let's put it AI into people's lives in ways that are very intuitive. They go out of their way to say it's easy to use. It's intuitive. You mentioned that it's incorporated with the Apple suite. what that actually looks like is things like you can refer to people in your contact list. So you could say, Oh, what did mom tell me last week, and it'll know who your mom is, and go look at the mom's texts, and then pull up what they said. Or you'd be able to automatically create photo montages based on text. Or if you're texting someone, you can say, Send this person an image of themselves, you know, as a rock star, because you want to say they're a rock star. And it'll actually automatically generate an image of them as a rock star using the same kind of diffusion technology we've seen in vid journey and in in Dolly, and all these things and what they're clearly trying to do here, I'm not sure I am down with this, particularly, it seems a little goofy to me. But maybe it's smart, is take this fast moving really sort of nerdy AI ecosystem, and, for lack of a better word, sort of dumb it down. I mean, it makes there be very easy, but very well incorporated, pieces of the AI basically put it in front of people so that anybody can use it in a really simple way. That's what they're trying to do. The calculator that you mentioned is another good example, I pad never had a calculator. Now it does. And the calculator is designed so that it basically solves problems for you. As you go, it is math notes feature. And it's like, yes, it's easy to use. Yes, for adults who are trying to calculate a tip or trying to do their taxes. Heck, who cares? If it solves a problem for you, that's exactly what you want a calculator to do. For students. That's not exactly what you want a calculator to do. They have smart replies, you know, you can just imagine how this worked inside Apple, they went to all these different parts of the device ecosystem and said, How can I make this a little bit better without creating big risk without making it very easy to do deep fakes without making it very easy to do crazy disinformation? Like how can we sort of tiptoe into this world, and meanwhile, leverage all the fast moving sort of chaos that is happening with all the other tech companies when we saw Google this week, withdraw their AI overviews feature. So Google has been experimenting with AI powered search. And it was it was very visible for many people, they pulled it back, they pulled it back, it was an opt in experiment, they've now made it very money, fewer people are doing it. And you know, we also know they pulled back on showing people so you're seeing a company like Google sort of take all these chances get a little hammered, and then have to pull it back and start again. And Apple is being very cautious here. We'll see if it pays off. I think it's a little risky. I think it's a little risky. Because I think, you know, yes, Apple owns the devices. But if they're not embracing this world, I think that the elite people, the people who are like, really want to be first movers in AI are going to, you know, start looking at Samsung devices or Android devices and start saying, Wow, this is so much more interesting. I have all the like, I think it's a risk should be so slow moving. Usually I like the sort of raise the floor approach to product development. But this feels so mild, I don't know. It's like these features feel so small, these Gen Moji. Are these like automatic replies? It's like, Oh, if you're on Do Not Disturb, and somebody sends you something important AI could figure out it's important and send it to you like, yeah, that is nice. But like that's such a tiny sliver of what AI is actually capable of that. It's almost like, who cares? Yeah, I

Ben Kornell: 38:59

mean, look, I think that's a popular reaction. That's a really popular reaction. And, you know, if Steve Jobs were living and breathing would be doing things the same way. At the same time, it's a different company. It's an incumbent. It's got real leverage in its spot in the ecosystem. And it doesn't have to burn crazy cash, while it lets these other AI players duke it out. And it can be a fast follower. That is not sexy, but that's what the incumbents do. And I don't think that we've seen a first mover advantage in AI, other than open eyes chat, GBT surge Serge, we've seen like a fast following approach really works well, for most companies in businesses. I think that's going to be the biggest challenge for open AI to keep it clean and bite people off. Because it just like an investment pit where you just have to keep going to stay ahead. I know we're up on time today, before we round anything out any other headlines that we want to just hit on briefly.

Alexander Sarlin: 40:07

So we saw Dewey raise $4.1 million. I announced that one this week they're doing AI driven data analytics there are around da, but you're in the right commonsense is in the growth is in that round? You know, we saw Odyssey raise $10 million. We've talked to Joe Connor from Odyssey on this show, or Yeah, in the past Fizz, which is a financing basically it's like debit cards for students that allow them to build credit raised $14 million. So we're starting to see some rounds come back in they're still a little smaller, but they're pretty exciting and they feel more specific. It feels like some of these things. People are raising money. It's like the business model may So I feel like more sense than some of the ones you see

Ben Kornell: 40:49

that you've seen are not Hail Marys. These are like, Okay, I figured out a formula, let throw. And the reason why I am excited about Dewey, for example is it's an enabling technology that will unlock things for all other edtech. So they basically take siloed data from, you know, 50 to 100 different systems and take all the apples and oranges and turn them all into oranges, so that you can actually compare data across systems. And you can look at data longitudinally and look at it by students, you can look at it holistically. And then it's got a query or interface where you're basically able to do freeform search to create data reports. You know, I think the other thing that this these rounds show is that the EdTech investors are going to keep investing. But things like infrastructure and finance and backoffice still are viewed as safer investment bets. And things that require shifting the learning paradigm are seen as riskier bets.

Alexander Sarlin: 41:53

Great, quick analysis, I think that's really powerful. And this is something we'll keep an eye on in the future. We don't have to go into the details of it. But we saw an interesting collaboration in the higher ed space this week, it was the Arizona State University always sort of a first mover, a tech leader, a scale leader signing a deal with the University of Tennessee, much closer to the East Coast. Basically, it's a collaboration deals 11 million plus dollar deal includes course exchanges, so that basically UT Knoxville students can take ASU courses and vice versa. And there's, you know, fee structures to make that work. It's also a training mode, which I think is really interesting there, Ed plus, which is Arizona state's, you know, really sophisticated online learning division is going to work with the UT System or the University of Tennessee system to basically help them develop their own expertise so that they can make a university model that's really interesting and different than, you know, go the bloomin stick who reported on this, you know, mentioned that that's a really very different than the OPM model, which is sort of about dependence, right, you don't want them to be independent and be able to do it themselves. And the goal is to bring 30,000 new students to University of Tennessee in the next five years. They're doing a joint degree program, I went deeper than I meant doing this. But basically, this type of university cooperation is something we've anticipated, actually, for a long time. But it doesn't happen that much. And when it does happen, it hasn't tended to work that well. But I think this is a clearly a pretty smart way to do this.

Ben Kornell: 43:22

Well, that wraps our news for this week. Thanks so much for our guests, Paul joining us here. But also thank you to our listeners. We're excited and hope you all have a great summer. And we'll be bringing you more news because if it happens in ed tech, you'll hear about it here on tech insiders. For

Alexander Sarlin: 43:40

our deep dive today, we are really excited to welcome Paul galosh, who is senior vice president and general manager of K 16. Higher Ed and workforce at ETS Educational Testing Service in New Jersey. Welcome to the podcast.

Paul Gollash: 43:55

Thank you very much, Alex and Ben, it's a real pleasure to be here. Yeah, so

Alexander Sarlin: 44:00

let's kick it off by talking a little bit about your transition. You were the founder of VOXI. And you were going for 10 years doing a really major English language learning platform. And then recently, about a couple of years ago have moved into ETS in a non language role. Can you tell us a little bit about that transition and what your trajectory has looked like?

Paul Gollash: 44:19

Yeah, that's right. It's a sort of a different path. But I you know, build blocks over the course of 10 years, absolutely loved that experience in English language learning in general. But after 10 years, I was, candidly a little bit fatigued with the subject matter. I pitched English language learning to lots of different people lots of different times over the course of a decade, and was ready for a new challenge. Interestingly, I met the CEO of ETs, I meet cevok. In my journey of VOXI, he was running a university outside the US that had non native English speaking students that needed English. So I was actually pitching him in the use of Oxy with his students, and we never consummated a deal, but we became friends. So when he took over as CEO, he was looking to bring some entrepreneurial talent in two ETS is a 75 year old nonprofit. So originally, he was thinking I could, you know, help out growing the TOEFL business, told him the same thing I just told you, which is that out of English language learning, and we settled on running the K 12 business, which includes Praxis are the required teacher licensure exam in 43 states and territories, as well as the skills for the Future initiative, which we just announced a merger with the mastery transcript consortium as part of that. And now the higher ed, which includes our higher ed business, which includes the GRE.

Ben Kornell: 45:32

Tell me a little bit about your structure. ETS is a nonprofit, and how do you think about nonprofits scaling solutions in this space versus for profit ventures? I think you know, A lot of times we talk to venture funders and founders, but it's really an innovative organization. Can you tell us a little bit about that? Yeah,

Paul Gollash: 45:54

absolutely. You say so it's a nonprofit, as you pointed out, it's about 7576 years old. Now, you know, we have about a billion dollars of earned revenue. So in many ways, there is sort of a commercial component, but we have as our sort of Northstar, our mission, which is to advance quality and equity in education. So whereas a for profit would be typically looking to maximize shareholder value, we don't have shareholders our mission, and our duty is to advance that mission, we really invented the category that we're in, which is, you know, most of our businesses are in standardized testing, you know, standardized testing is going through a massive transformation as ETS. So it's a really exciting time to sort of be, you know, at the center of sort of educational, and I'd say, workforce measurement. And what ETS is core capability is we call it psychometrics. It's the measurement of learning. So it's a fascinating sort of area of science, and one that we think has, you know, incredible relevance in the future. One

Alexander Sarlin: 46:51

movement in this assessment space that we've been following, and it's obviously very relevant to where ETS is at right now is this more holistic concept of what experience looks like and what somebody needs to be doing in terms of skills to get into a particular career trajectory, or things like that there's this portrait of a graduate movement. And this has been really led by mastery transcript collect consortium, it's one of the sort of main organizations now that that's part of ETs, tell us a little bit about your thinking about that kind of portrait of a graduate holistic assessment world? Yeah. So

Paul Gollash: 47:23

it is really an interesting moment in time to think about durable skills and how we can measure the skills that will be predictive of success in life and work for our young people. The backstory is I meet our CEO, and Tim Knowles from the Carnegie Foundation, they got together about a little, I guess, about a year and a half ago, and formed a partnership to really explore how we could better serve the students of today and tomorrow that are going to need a way to demonstrate these durable skills that employers have been telling us, implicitly for decades are important. And you know, in recent years really explicitly, right that these are the things that matters, collaboration, perseverance, communication, creativity, and I was sort of tasked with incubating that business from the concept that I meet in 10 came up with, and we talked to a number of different states who really crystallized that sort of vision around what we could be doing. And in those conversations, I met Mike Flanagan, the CEO of MTC, and it became abundantly clear from our first conversation that, you know, he and his team had been spending quite a bit of time thinking about the exact same problem that we were trying to address with our skills for the Future initiative. And that, you know, it was really sort of a match made in heaven, in many ways. They had some traction, and some connectivity to the high schools, but whose students were using this transcript to apply to college and the transcript itself, this skills transcript, which is a little bit more flexible than many of the portraits of a graduate, but as you know, similar in nature, you know, it's accepted by over 400 universities around the world. That's a lot. Yeah. Well, those conversations, you know, moved from sort of partnership opportunities. And we realized that I think together, we would be able to do do more, I think in this case, one plus one really does equal three, or maybe even more. Yeah,

Ben Kornell: 49:05

the MTC and I think it's a game changer for assessment. And, you know, what I would say is, if we change what we measure, we change what matters. And that's why I love ETS is mission and leverage point. It's just fascinating to me that it's both an incredible mission, and then also a gigantic organization. Yeah,

Paul Gollash: 49:27

if I can actually build on something that you just said, Ben, which is changing what we measure is so you know, vitally important, I think, to make sure that the next generation is ready for life and work. The other really interesting thing that we're hoping to do with this has actually changed where and how we measure. So so much of learning, especially these durable skills, takes place outside of the classroom. And technology has evolved to the point where increasingly we are going to be able to measure skills and competencies that, you know, people are building not in a structured classroom environment, but that they might be demonstrating as a caregiver to someone in their home. Picking up trash on the side of the road as a Girl Scout, perhaps is a very good data signal about your your civic engagement. Yeah, there's sort of new forms of evidence that will, I think, be really positive, I should say, you know, good indicators of future success in life and work. Yeah, I

Alexander Sarlin: 50:22

think there's been this sort of broad recognition over the last maybe decade or so, where people are starting to realize that traditional standardized testing while powerful and definitely has some some really important use cases, we've seen universities sort of go back and forth on their test optional policies, but the idea of bringing in external experience and trying to and durable skills and all of these parts a person's background that may not be as readily tested in traditional standardized testing needs to be part of it. I wanted to ask you about the practices exam, because you know, this is sort of the gold standard, you know, the standard teacher exam in the US. And you know, we've talked on this podcast a lot about the pipeline for teachers, I'm sure you think a lot about this tell us about that exam and how it relates to the teacher landscape, the educator pipeline landscape in the US.

Paul Gollash: 51:09

Yeah, I mean, I could talk forever about Praxis is just a testing service to do well. And in a really critically important, you know, part of our society, right, we need high quality, we need more teachers, we need higher quality is here. And we need more diverse teachers in our classroom. As I think I said earlier that, you know, practice really sits at an interesting spot in that educator pipeline, as educators move from a sort of increasingly diverse set of pathways. You know, typically, most of the year one teachers would have gone through a traditional Educator Prep Program, like a teacher's college, if you will, but increasingly, given the shortage and given that enrollments in these educator prep programs are going down, we're seeing alternative routes. And that could be a ParaPRO, paraprofessional to teacher transition, there's a growing movement around Grow Your Own. And you know, Registered Apprenticeships are increasingly playing a part. So we think this is just a fascinating time and a really important time, and very much worth all of the resources that ETS can bring to bear. It's a worthwhile problem to be solved. And, and the next generation of practice assessments will look and feel quite differently than they are today. Today, we test a lot of content knowledge, you know, we make sure that the adults in the room are going to be in front of our kids every day that they know the content that they're going to be required to teach, whether that's, you know, fractions to a middle schooler, or elementary school students, or you know, chemistry or physics or high school students. But really, there's other skills required to be a high quality educator, and those ranges from things like the ability to engage a class empathy, you know, parental engagement, etc. So there's a lot of other skills and ETS has foundational research on what we call high leverage teaching practices. So over the next couple of years, we're looking to completely redesign the suite of 160 different practice assessments. The other thing is, we want to be better leverage that that position we have because you know, aspiring teachers from from all over the country do come talk to us, they come to our website, we want to do a lot more than just deliver a licensure exam. So we've started on that journey, we've launched quite a bit of additional teacher supports, or I should say, candidate supports in the form of test preps, new partnerships that are bringing different types of test preparation, you know, materials and experiences, we also are very interested in professional development, we think that the data that we have on an incoming cohort of teachers for a district could be very valuable in tailoring an induction program or an onboarding experience, which could go help solve the year one attrition problem, being a first year teacher in a K 12 school in the US is a really, really challenging job. It is daunting to be in front of a roomful of 25 or so you know, 12 year olds, etc. So we want to be able to better prepare them. And I think we have a real opportunity and sort of moral obligation to do that, given given where we are,

Alexander Sarlin: 53:54

you know, we're not going to let you get out of here without talking about AI. So all right, let's just jump into it. So ETS has a full AI division. It's obviously you know, it has done psychometrics for a long time. He has tons of data to crunch. Can you tell us a little bit about how you personally and ETs broadly are thinking about this AI era in education, whether it relates to AI literacy for teachers, whether it relates to using AI internally to make sense of the massive amount of data? How do you think about this? Those

Paul Gollash: 54:24

are two of the primary ways that we are thinking about it, right? How like aI literacy, and you know, AI for teachers is something you know, we have a partnership with teach that AI and co.org. supporting that. That's, I think an incredibly important part is making sure that the next generation of educators are able to use and harness the power of AI, and also not feel threatened by it right, the last thing you would want is an aspiring or potentially interested educator to be dissuaded from entering the profession because of that, right. So yeah, really making sure that the educators entering the classroom know both the positive and the risks associated with AI. And then internally, I have to say, as a sort of a measurement science company like ETS AI is really at the at the center of everything that we're thinking about over the next, you know, one, three and five years. If you zoom out sort of what what EGS does, across all of our portfolios, we build deliver and score assessments, right? The power of AI and especially generative AI is making that sort of turning that on its head in a really, really exciting way, we're able to capture more valuable data signals with higher fidelity and do so in a less intrusive and better sort of user experience or test taker experience, if you will. So yeah, that mean the future of assessments will be built on the sort of, you know, AI going forward and that just presents a myriad of opportunity for for us to to go after that. You

Alexander Sarlin: 55:46

heard it here. First, the future of assessments from ETS, one of the assessment leaders in the US and globally will certainly be aI driven. Really interesting stuff. I think your you and your team are doing really innovative work. And as you said, Ben, you know, what is measure what matters, what's assessed, bleeds back into exactly what's taught and how people think about things is the lot of leverage that ETS has over the entire education ecosystem. And it's great to see your you're using it so responsibly. This is Paul galosh, Senior VP, and general manager of K 16. Higher Ed and workforce at ETS. Thanks so much for being here with us on weekend ad tech from ad tech insiders.

Paul Gollash: 56:25

Thank you so much for inviting me. It's been a pleasure and I really enjoyed the conversation. Thanks, Alex. Thanks, man. Thanks

Alexander Sarlin: 56:31

for listening to this episode of Edtech Insiders. If you liked the podcast, remember to rate it and share it with others in the EdTech community. For those who want even more Edtech Insider, subscribe to the free Edtech Insiders newsletter on substack.